By Whitney Troxel
Visa CE 3.0 rules will be effective from April 15, 2023. It can be challenging to understand and prepare for these changes, but merchants can take advantage of this opportunity to improve operational efficiency, lower chargeback rates, and increase revenue. In this blog post, we will discuss the tools available under Visa CE 3.0 standard and provide best practices for business owners to adopt and enhance their processes to comply with the new regulations while boosting sales performance.
Understanding Visa CE 3.0
Visa’s chargeback and dispute resolution rules, otherwise known as Compelling Evidence (CE), have long been a crucial part of merchant payments processing. With the arrival of CE 3.0, Visa has increased the level of detail and rigor required for the filing and management of chargebacks.
CE 3.0 is designed to streamline the chargeback process, limit disputes, and differentiate between valid and fraudulent disputes. It’s in your business’ best interest to understand these new regulations and make any necessary changes to meet the new standards.
New evidence categories
Visa CE 3.0 introduces new evidence categories that merchants can use to dispute a chargeback. These categories include the following:
- proof of cardholder authorization
- proof of delivery
- proof of service
Merchants can use documents like signed delivery receipts, tracking information, and customer service records to prove that the transaction was valid and that the customer received the goods or services they paid for.
More specific guidelines
Visa has provided more specific guidelines on what constitutes valid evidence. For example, merchants can now use screenshots of their website to prove that the customer agreed to their terms and conditions. Merchants can also use audio recordings to prove that the customer was aware of the purchase and agreed to the terms.
Shorter timeframe for submitting evidence
Visa CE 3.0 requires merchants to submit their compelling evidence within 30 days of the chargeback, rather than the previous 45-day timeframe. This shorter timeframe means that merchants need to act quickly to gather and submit evidence, but it also means that disputes will be resolved faster.
Changes to the dispute resolution process
Visa has made changes to the dispute resolution process itself. In the past, disputes were often resolved in favor of the cardholder if the evidence provided by the merchant was not strong enough. However, version 3.0 now requires issuers to provide specific reasons for upholding a chargeback. This means that merchants will have a better understanding of why their dispute was not successful and can use that information to improve their evidence in the future.
Review and Update Terms and Conditions
To comply with CE 3.0, merchants should review and revise their terms and conditions. Make sure your terms and conditions are easily accessible and clearly stated to avoid penalties and enhance customer satisfaction.
Upgrade Your Record Keeping
To effectively fight chargebacks and present compelling evidence, it’s crucial to maintain detailed records of every transaction. This includes having evidence of cardholder authorization and delivery, as well as documentation of any services provided.
According to Visa’s regulations, it is important to record and store this important information for at least 180 days from the date of the transaction. This will help you safeguard your business and customers, and also enhance your credibility and trustworthiness in the industry.
Be sure to work with your payment processor to ensure they have the documentation and evidence you need. Your processor may also have additional resources to help you with chargeback management.
Utilize a Chargeback Prevention Service
In the past, many merchants had to rely on Visa’s pre-existing verification and validation programs to reduce their chargeback rates. Under CE 3.0, considerable responsibility falls on the merchants to prevent chargebacks.
It is essential to adopt chargeback prevention services offered by various third-party service providers that employ technologies such as transaction monitoring, fraud management, identification verification, and machine learning. Don’t be deterred by the added expense. These services often pay for themselves.
Maintain an Active Chargeback Management Strategy
Under CE 3.0, it is crucial to keep an active chargeback management strategy in place. This includes:
- monitoring and tracking current chargeback processes
- tracking performance metrics
- ensuring your chosen chargeback prevention services are performing to standards
- reviewing chargeback processes regularly to identify areas of improvement
If you take proactive steps to prevent and handle chargebacks, it will help you save time, money, and resources. At the same time, it will make sure that the transaction procedure runs more smoothly for both your customers and your business.
Work with your payment processor to develop a chargeback management strategy that works for your business. If you haven’t already, establish clear communication channels with your payment processor. Look into their chargeback prevention and management services.
Final Thoughts
Visa CE 3.0 update has made it clear that merchants and financial institutions must become proactive in forming strategies to combat fraud and chargebacks. Prevention and transparency are key, but being prepared is just as crucial.
Taking action now to adjust processes and procedures can save all involved parties time, money, and stress down the line. Though making changes may seem stressful at first, you won’t regret the added benefits.
Ready to get started? Contact Nexio and we’ll work together with you to make sure Visa CE 3.0 rules are met without worry or hassle. It’s not too late to stay up-to-date on today’s new standard of payment security — let’s take back control of your business together!